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Stamp duty will be abolished immediately for the majority of first time buyers, Chancellor Philip Hammond announced in his November Budget.

In an effort to address the housing crisis, first-time buyers will pay zero stamp duty on homes costing under £300,000 and for the first £300,000 of any property that costs up to £500,000.

Hammond estimates the move will cut the amount of tax payable for 95% of first time buyers and abolish it altogether for 80% of them. The change is expected to offer an average saving of £1,660 for first-time buyers.

Hammond said the move was part of the government’s pledge to the next generation that “the dream of home ownership will become a reality”.

Brian Palmer, tax policy expert, Association of Accounting Technicians, described the announcement as the “show stopping moment” of the Budget.

He said: “This removes a significant burden for many thousands of people who have been struggling to access the housing market, and will increase house purchases. However, it is of no value to other potential buyers. AAT will continue to call for stamp duty liability to be switched to the seller, so that people moving up the housing ladder would be paying duty on the (likely) lower-priced house they are selling, not the higher-priced one they are buying.”

However, Palmer said calls for stamp duty to be scrapped altogether would be a step too far, costing the Exchequer in excess of £11billion per year.

He continued: “This change will be far less costly for the Government, and will at least go some way to improving Britain’s housing mobility crisis and help both employment and productivity.”

Justin Urquhart, co-founder and head of corporate development, Seven Investment Management, also welcomed the news: “Most generations have had their challenges; from the hyperinflation of the 1970s and the 3-day week, through to the double digit mortgage rates of the 1980s.

“But today’s struggles are unique because of the stark intergenerational differences. Sky-high house prices disproportionately affect the young, as do the uncertainties around Brexit in the long-run, which is increasingly becoming a dragging sea anchor. So the scrapping of stamp duty for first time buyers has to be welcomed – although for the wealthier it may well be the Bank of Mum and Dad, already apparently Britain’s ninth largest mortgage lender, who may benefit the most.”

However, Tom Selby, senior analyst at AJ Bell, said the move by the Chancellor will have a greater impact on those living in the south of England and struggled to see how it would have a “fundamental” effect on the affordability of homes.

He said: “The stamp duty relief for first time buyers announced in today’s budget will be a welcome boost to people purchasing their first home but the impact will be felt disproportionately in the south of England.

“The saving based on the average house price for first time buyers in the UK will be £1,654. However, this more than doubles in the South East to £3,839 and in London it would be £5,000. Whereas, in the North, the average house price for first time buyers barely exceeded the previous stamp duty threshold so the benefit for many people will be almost non-existent.

“The average deposit for a first time buyer in the UK is £32,899* so the stamp duty saving of £1,654 will only represent around 5% of their deposit. Whilst that will help, it is difficult to see how this is going to fundamentally change the affordability of house purchases for first time buyers.”

The Office for Budget Responsibility said the tax cut would likely result in house prices rising by 0.3%.

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